State Administration of Taxation, Circular on Issues Concerning the Implementation of Preferential Income Tax Treatment for Venture Investment Enterprises

国家税务总局关于实施创业投资企业所得税优惠问题的通知

December 08, 2009 | BY

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Venture investment companies may enjoy tax reduction.

Clp Reference: 3230/09.04.30 Promulgated: 2009-04-30 Effective: 2008-01-01

Issued: April 30 2009
Effective: January 1 2008

Main contents: If a venture investment enterprise invests in an unlisted small or medium high and new technology enterprise in the form of an equity investment for at least two years (24 months) and satisfies the conditions set forth below, it may deduct 70% of its investment in the small or medium high and new technology enterprise from its own taxable income in the year that it holds the equity for two full years; if the same cannot be deducted fully in the year in question, it may be carried forward and deducted in subsequent tax years:

(1) its scope of business complies with the Tentative Measures for the Administration of Venture Investment Enterprises and it is registered with the administration for industry and commerce as a “venture investment limited liability company”, “venture investment company limited by shares” or other such professional venture investment enterprise with legal personality;

(2) it has completed record filing on the conditions and by the procedure specified in the Tentative Measures, has passed the annual inspection by the record filing authority and its investment operation complies with relevant provisions of the Tentative Measures;

(3) the small or medium high and new technology enterprise invested in by the venture investment enterprise shall, in addition to having been recognised as a high and new technology enterprise in accordance with the Measures for the Administration of the Recognition of High and New Technology Enterprises and the Guidelines for the Administration of the Recognition of High and New Technology Enterprises, satisfy conditions such as having a workforce of not more than 500 persons, annual sales (business) turnover of not more than Rmb200 million and total assets of not more than Rmb200 million.

Related legislation: PRC Enterprise Income Tax Law , Mar 16 2007, CLP 2007 No.3 p.21; Implementing Regulations for the PRC Enterprise Income Tax Law , Dec 6 2007, CLP 2008 No.1 p.21; Tentative Measures for the Administration of Venture Investment Enterprises, 2005;Provisions for the Administration of Foreign-invested Venture Investment Enterprises , Jan 30 2003, CLP 2003 No.2 p.35; Circular on the Issuance of the Measures for the Administration of the Recognition of High and New Technology Enterprises, Apr 14 2008, CLP 2008 No.5 p.27; and Circular on the Issuance of the Guidelines for the Administration of the Recognition of High and New Technology Enterprises

clp reference:3230/09.04.30prc reference:国税发 [2009] 87号promulgated:2009-04-30effective:2008-01-01

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